The global financial crisis provoked a wholesale reassessment of prudential policy and the framework within which it is conducted, and also led central banks to adopt very accommodate stances using an array of unconventional instruments. The Austrian National Bank (OeNB) workshop was an occasion to look back on the choices made in the wake of the crisis—especially choices about institutional structure, governance, and the coordination of policies—and to reflect on how our understanding of the interaction among monetary, microprudential, and macroprudential policies has evolved over the subsequent ten years. (Other financial sector policies such as consumer protection are important but less closely related to central banking.)
One reaction to the financial crisis was to give new prominence to macroprudential oversight, concerned with the stability of the (financial) system as a whole. New institutions were established and tools were created or adapted. (Prior to the crisis, macroprudential concerns centered on dollarization and to some extent rapid credit growth in emerging market countries.)
Another reaction, seen in many countries, was to widen the central bank mandate to encompass more responsibility for prudential and also crisis management functions. The wider mandate reflects the pivotal role played by central banks in handling the crisis.
